Opposition parties have accused the Scottish National party of "deception, spin and half-truths" after it cut back public spending to finance a deal to freeze council tax and cut business rates in Scotland.

The parliament was told yesterday by the SNP's finance minister, John Swinney, that its first budget since taking power "heralds a new era of optimism, opportunity and delivery for all of Scotland" .

He unveiled a deal with Scotland's local government organisation, Cosla, to fund a three-year, across the board freeze in council tax - a deal which will cost some £70m a year but has yet to be agreed by all 32 councils.

Opposition MSPs jeered when Swinney confirmed that a pledge to wipe out all student debts - a promise costed at more than £1.6bn - had been abandoned. Swinney said: "We are in a tough financial climate and we will not be able to deliver on all of our commitments."

The SNP's hopes of securing a crucial deal with the Tories and Greens to get its budget passed next year looked doubtful last night, after both parties said they wanted greater concessions to guarantee their support. As a minority administration with 47 seats, the SNP needs both the Tories' 16 votes and Greens' two votes to secure the 65 seats for a parliamentary majority. If it fails to get the budget passed, the SNP risks losing power at Holyrood.

In an attempt to win Tory support, the SNP confirmed it would cut business rates for up to 150,000 small firms over the next three years. The Conservatives said this fell short of a promise to abolish rates for 130,000 firms and also attacked the executive for failing to hire 1,000 new police and cutting drug rehabilitation spending.

Among environmental initiatives designed to win Green support, Swinney announced a £10m international "horizon" prize for renewable energy technologies. But rail and bus services will be cut. The Greens' Patrick Harvie said ministers had broken promises by cutting social housing spending by 6% and continuing with climate-busting proposals to extend the M74 and build a second Forth bridge: "The SNP will have to work harder to ensure the Greens can support the final budget."

The Liberal Democrat leader, Nicol Stephen, said it was a budget of "sham promises and shifty auditing. A budget of deception, spin and half-truths. And on the public services that the people of Scotland care about most, this budget deceives the most."

He said the SNP had failed to fund cuts in all class sizes for five- to eight year olds to 18, broken a manifesto pledge to hire 1,000 police and extend free nursery places.

As anticipated, promises to pay off all student debts - a pledge estimated to cost £1.6bn - had been abandoned, he said.

The Labour finance spokesman, Iain Gray, said the SNP had been given nearly £30bn a year to spend, double what the executive had to spend in 1997: "We are only six months into the first ever SNP government yet they have admitted they are dropping the pledges which got them elected."

Detailed analysis of the Scottish executive's budget showed that many core services will enjoy only slight rises and then cuts in real terms over the next three years - a consequence, says the SNP, of the tightest Treasury spending settlement of recent times.

Taking inflation into account, spending on policing and prisons will rise slightly but fall to just over £1bn a year by 2011.

Spending on rural affairs and the environment will remain at just over £600m a year, while health funding will rise marginally from £10.9bn to £11.3bn over the next three years. Spending on schools and colleges will rise from £2.47bn to £2.5bn.